Wage and Hour Division (WHD)

Misclassification of Employees as Independent Contractors

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The misclassification of employees as independent contractors presents one of the most serious problems facing affected workers, employers and the entire economy.

Misclassified employees often are denied access to critical benefits and protections to which they are entitled, such as the minimum wage, overtime compensation, family and medical leave, unemployment insurance, and safe workplaces. Employee misclassification generates substantial losses to the federal government and state governments in the form of lower tax revenues, as well as to state unemployment insurance and workers’ compensation funds. It hurts taxpayers and undermines the economy.

The DOL Misclassification Initiative

Alaska

Alabama

The Wage and Hour Division entered into this agreement with the Alabama Department of Labor with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting coordinated investigations and sharing information consistent with applicable law.

Arizona

California

The Wage and Hour Division entered into this agreement with the California labor and Workforce Development Agency with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Colorado

The Wage and Hour Division entered into this agreement with the Colorado Department of Labor and Employment with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by, as appropriate, conducting coordinated enforcement actions and sharing information consistent with applicable law.

Connecticut

The DOL’s Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), and Employee Benefits Security Administration (EBSA) entered into this agreement with the State of Connecticut’s Department of Labor with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by, as appropriate, conducting coordinated enforcement actions and sharing information consistent with applicable law.

Delaware

Florida

The Wage and Hour Division entered into this agreement with the Florida Department of Revenue, General Tax Administration with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information.

Georgia

Hawaii

The Wage and Hour Division entered into this agreement with the Hawaii Department of Labor and Industrial Relations with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Iowa

The Wage and Hour Division entered into this agreement with the Iowa Workforce Development Department with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Idaho

Illinois

The Wage and Hour Division entered into this agreement with the Illinois Department of Labor with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Indiana

Kansas

Kentucky

The Wage and Hour Division entered into this agreement with the Kentucky Labor Cabinet with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Louisiana

The Wage and Hour Division entered into this agreement with the Louisiana Workforce Commission with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Massachusetts

The DOL’s Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), Employee Benefits Security Administration (EBSA), and Office of Federal Contract Compliance Programs (OFCCP) entered into this agreement with the Commonwealth of Massachusetts, Joint Enforcement Task Force on the Underground Economy and Employee Misclassification through the Secretary of the Executive Office of Labor and Workforce with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by, as appropriate, conducting coordinated enforcement actions and sharing information consistent with applicable law.

Maryland

The Wage and Hour Division entered into this agreement with the Maryland Department of Labor, Licensing and Regulation, Division of Unemployment Insurance, and the Maryland Department of Labor, Licensing and Regulation, Division of Labor and Industry with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting coordinated investigations and sharing information consistent with applicable law.

Maine

Michigan

Minnesota

The Wage and Hour Division entered into this agreement with the Minnesota Department of Labor and Industry with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Missouri

The Wage and Hour Division entered into this agreement with the Missouri Department of Labor and Industrial Relations with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Mississippi

Montana

The Wage and Hour Division entered into this agreement with the Montana Department of Labor and Industry with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by, as appropriate, conducting coordinated enforcement actions and sharing information consistent with applicable law.

Nebraska

New Hampshire

The DOL’s Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), and the Employee Benefits Security Administration (EBSA) entered into this agreement with the New Hampshire Department of Labor and Workforce Development Agency with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Nevada

New York

The Wage and Hour Division entered agreements with the New York Department of Labor and the Labor Bureau of the New York State Office of the Attorney General with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Pennsylvania

Rhode Island

The DOL’s Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), and Employee Benefits Security Administration (EBSA) entered into this agreement with the State of Rhode Island’s Department of Labor and Training with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by, as appropriate, conducting coordinated enforcement actions and sharing information consistent with applicable law.

Tennessee

Texas

The Wage and Hour Division entered into this agreement with the Texas Workforce Commission with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Utah

The Wage and Hour Division and the Utah Labor Commission entered into this agreement with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Vermont

Washington

The Wage & Hour Division and the State of Washington Department of Labor & Industries entered into this agreement with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

Wisconsin

The Wage and Hour Division entered into this agreement with the Wisconsin Department of Workforce Development with the specific and mutual goals of providing clear, accurate, and easy-to-access outreach to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information consistent with applicable law.

West Virginia

Wyoming

The Wage and Hour Division entered into this agreement with the Wyoming Department of Workforce Services with the specific and mutual goals of providing clear, accurate, and easy-to-access compliance information to employers, employees, and other stakeholders, and of sharing resources and enhancing enforcement by conducting joint investigations and sharing information.

In recent years, the employment relationship between workers and the businesses receiving the benefit of their labor has fissured apart as companies have contracted out or otherwise shed activities to be performed by other businesses. This is accomplished through, for example, the use of subcontractors, temporary agencies, labor brokers, franchising, licensing, and third-party management.

Fissuring may lead to the misclassification of employees as independent contractors in a variety of ways, such as employers simply mislabeling certain employees as independent contractors to reduce payroll costs. The Department supports the use of legitimate independent contractors, who play an important role in our economy, but when employers deliberately misclassify employees in an attempt to cut costs, everyone loses.

The Wage and Hour Division is working with the IRS and many states to combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled. We have entered into partnerships with 23 states to work together on this issue in a variety of ways – through, for example, information sharing and coordinated enforcement – to ensure that we are all using our resources most strategically, effectively and efficiently to address this significant problem. In some cases, these agreements include the cooperation of the Employee Benefits Security Administration, Occupational Safety and Health Administration, Office of Federal Contract Compliance Programs, and the Office of the Solicitor.

This collaboration is making a difference - In Fiscal Year 2014, WHD investigations resulted in more than $79 million in back wages for more than 109,000 workers in industries such as the janitorial, temporary help, food service, day care, hospitality and garment industries. Through this initiative, WHD will continue to strive to assure that workers in these industries receive a fair day’s pay for a fair day’s work.

Select agencies from the “Quick Links” box to learn more about the role of each in this critical initiative. Select a state from the interactive map to view state information and that state’s agreement with WHD.